While Vivus' share price slid on the news that regulators in the USA have put back their final decision on Qnexa by three months, analysts at Cowen & Co are still confident of approval for the obesity drug.
Earlier this week, the US Food and Drug Administration extended the Prescription Drug User Fee Act (PDUFA) goal date from April 17 to July 17 for the New Drug Application on Qnexa (phentermine/topiramate). The move has been deemed necessary as the agency needs more time to review Vivus' risk evaluation and mitigation strategy for Qnexa, which was submitted last week. The REMS is considered "a major amendment to the NDA", hence the delay.
Cowen's Simos Simeonidis and Yatin Suneja issued a research note saying that "we don't view the FDA's decision to extend the review time as indicative of any issues with the NDA". They add that given what transpired in February, when the FDA's Endocrinologic and Metabolic Drugs Advisory Committee voted 20-2 in favour of approval, "we continue to believe that the agency wants to (and possibly, given the US obesity issue, has been guided that it should or even has to) approve an anti-obesity compound.
Furthermore, the analysts go on to argue that "we believe Qnexa is clearly the safest and most efficacious of the three agents currently under review by the FDA". The other two are Orexigen Therapeutics/Takeda's Contrave (naltrexone/bupropion) and Arena Pharmaceuticals/Eisai's lorcaserin, both of which were also rejected at the first time of asking by the FDA, like Qnexa.
__However, they warn that this extra 90 days "theoretically leaves the door open for a new drug safety issue to surface between now and then, that may increase media/political/governmental attention on patient safety". Messrs Simeonidis and Suneja also say the argument that "an anti-obesity compound that has a cardiovascular signal should conduct pre-approval trials" could be made once again and have an impact especially if it's made by "a vocal and influential party" eg Steven Nissen of the Cleveland Clinic or a member of Congress.
Nevertheless the brokers believe the FDA "has probably already decided that it will approve Qnexa, so we don't see any negative read-through from this delay". They expect Vivus shares to trade sideways to slightly up into the PDUFA date, and up further post-approval, adding that a potential acquisition of the company is "a scenario that we see as likely if Qnexa is approved".